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Minnesota’s Solar Race Meets a Hurdle

This week, the city of Lindstrom announced plans to install solar on public buildings that would save the city $1400/year on their energy bills. Lindstrom will lease solar arrays for its City Hall, public works building and a municipally owned liquor store with the opportunity to buy the Minnesota-made Silicon Energy panels at the end of their lease which could save the city $425,000 over the expected 40 year lifespan of the solar panels. Lindstrom is in good company, joining more than 656 other solar projects happening around the state according to Clean Energy Resource Team’s map. Incentives, like Xcel Energy’s Solar Rewards program and federal renewable energy tax credits, are important to help customers, like Lindstrom, get over the upfront costs of installing solar on their homes and businesses.

The city of Minneapolis has used Xcel Energy’s Solar Rewards on three of the seven city solar projects and are 80% to their goal of installing 1 MW of solar PV on city buildings by 2015. That’s why it’s a shame Xcel Energy set up a hurdle in Minnesota’s solar race when it announced plans in June to end its popular Solar Rewards program in 2013. Solar Rewards allocated $5 million a year and resulted in 560 solar arrays in their service territory since 2010. Just this year, Xcel Energy noted the popularity of its Solar Rewards program, which has had wait lists and customers turned away in recent years, and stated they were modeling the addition of 1.7 MW of solar from Solar Rewards each year through 2032. That’s the kind of certainty that the more than 50 companies in Minnesota that provide solar services and equipment like to see. So imagine their (and our) surprise when Xcel Energy asked the Department of Commerce to reduce the program for 2013 (cutting the incentive offered from $2.25 to $1.50 per watt) and eliminate it altogether after that!

Sierra Club and several other environmental groups submitted comments asking the Department of Commerce not to approve Xcel’s request to end Solar Rewards. The Department of Commerce is expected to announce its proposal in August on whether or not to allow Xcel Energy to end Solar Rewards which will be open for public comment. The final decision is expected in October.